New Zealand are planning to ban overseas property investors from purchasing existing residential properties, in a bid to make property more affordable for New Zealand citizens.
Prime Minister Jacinda Ardern announced the plan at a recent press conference. He said: ‘Foreign speculators will no longer be able to buy houses in New Zealand from early next year. We are determined to make it easier for Kiwis to buy their first home, so we are stopping foreign speculators buying houses and driving up prices. Kiwis should not be outbid like this.’
Property prices in the country have boomed over recent years, with average property prices in the largest city of Auckland surpassing 1 million New Zealand dollars.
Like many other countries around the world, the ban will only apply to existing properties. Off-plan and newly built properties will still be available to overseas property investors.
Sophie Chick, head of residential research at Savills Australia, commented: ‘Foreign buyers of existing homes have become the target of governments globally with increased taxation and buying restrictions. This though hasn’t really put the brakes on foreign investors who often prefer to buy off-the-plan anyway.’
The plan was not supported by the opposition in New Zealand however, as there is limited data on how many non-resident foreigners actually buy residential houses, with the previous government claiming they accounted for as little as two per cent of overall purchases.
Opposition finance spokesman Steven Joyce said: ‘This is a policy that’s designed to solve a political problem. Evidence in both Australia and here in New Zealand is that overseas buyers don’t have a significant impact on the housing market.’
The New Zealand government plan to introduce an amendment to the Overseas Investment Act to classify residential housing as ‘sensitive’, meaning non-residents or non-citizens cannot purchase existing residential dwellings. Australians won’t be affected because New Zealanders are exempt from Australia’s policy.